Apple announces 2021 holiday quarter results January 27. Follow the Apple Maven’s live blogging coverage to see if the company impresses and if the stock can recover.
Apple will soon report its fiscal first quarter 2021 earnings. The Apple Maven will be commenting on Cupertino’s results via live blog starting at 3:55 PM EST on January 27, 2018. Enjoy this exciting evening with us!
Continue reading below to see the live blog. To see the latest updates, refresh your browser especially after this Thursday’s trading session.
Before we dive in, let’s recap what Apple can expect on earnings day. Scroll down to the section “Live Blog Starts here” if you’d prefer to skip the preview.
Record quarter coming up
Wall Street predicts that Apple will bring in $118.5 billion in holiday quarter revenues. This will be Apple’s largest quarterly sales figure in its history. However, the implied growth rate of 6% is still modest when compared to the incredible quarters Apple has just delivered.
Analysts expect that EPS will be around $1.89, which would mean around 13% growth YoY. For at least the last 20 quarters (i.e. Apple has never delivered consensus-lagging earnings per share for at least the past 20 quarters (i.e., approximately five years).
Apple’s management team offered some general comments on the holiday results during its most recent earnings call. This was three months ago.
All segments should see growth YOY except for the iPad, which saw its revenues rise 41% in the same quarter last year.
Six billion dollars in revenue should be lost each quarter due to supply chain disruptions or component shortages.
Both gross margins and op margins are expected to increase significantly YOY to 1.5 to 2 percentage point.
Keep the following table in mind when analyzing fiscal Q1 numbers. Any improvement on the this Year list could be interpreted as a positive.
Correction of Apple stock
The 2022 year has been difficult for Apple stock ( AAPL ). The shares fell 12% after reaching $182 on January 3. Interestingly, AAPL is down on every trading day in the last 7 sessions as the market turns bearish.
The Apple Maven discussed trimming AAPL in December as the stock surged through the mid-holiday quarter. Valuations look a little more appealing today, as shares have entered correction territory with the Nasdaq.
Is it a good time now to buy Apple stock and ride the potential recovery after earnings? Keep watching to see what happens.
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3.03 p.m. PST Thank you for joining the Apple Maven tonight! Have a great night and happy investing!
3:02 PM PST: The key takeaway is that not much has changed at Cupertino. Despite the supply chain problems, Apple continues to perform exceptionally well. Apple products and services are in high demand. Investors should expect more of the exact same from a business standpoint. The stock likely benefited from being down around 12% from its January high. Dip-buyers are taking advantage of this opportunity, at least for the moment.
2 :59 p.m. PST The earnings conference is over! AAPL is up a solid +5%
2 :56 p.m. Pacific Standard Time: I have prepared the following table for fiscal Q2. This projection is based on the current revenue consensus (Apple does not have guidance for it), the middle of the P&L guidance range and my estimate of the share count. My $1.34 EPS projection is a little better than the consensus. This means that Apple’s outlook today was slightly better than expected.
2:56 PM PST: Questions about Apple TV+ content. The call is clearly coming to an end, and the main topics have been covered. Apple stock up +5% after hours. Tim Cook claims that Apple has much more content to discover.
2:54 PM PST: Questions about installed base and service business. Tim believes there’s still plenty of room for growth.
2:51 PM PST: A question about the iPhone cycle. Will the segment continue to grow? What are the growth opportunities? Tim believes that iPhone is now a part of everyone’s daily lives. Record numbers of switchers and upgraders. Long-term optimism
2 :49 p.m. Pacific Standard Time: Question about guidance and March quarter seasonality. Luca reiterates his point regarding supply chain constraints. They are still present, but they are decreasing sequentially. The business is doing well.
2:46 PM PST: Questions about Apple TV+ and slowing subscribers growth (analyst probably thinking of Netflix). Tim states that he doesn’t share the per-service subs numbers. Subs are growing well in the total company. Tim, who has won Apple’s awards again, is happy about his competitive position.
2 :45 p.m., PST: Question about supply chain vs. expansion. Tim believes that inflation will hit margin and opex. He believes that some of the inflation is temporary, but “we’ll see”.
2.43 p.m. PST Question about Greater China. Tim claims that sales increased 21% in the last quarter but won’t discuss macro-level factors. iPhone is doing well with upgraders, switchers, despite being constrained during the quarter.
2.42 p.m. Pacific Standard Time: Questions about how to allocate R&D funds and which opportunities to pursue. Tim believes Apple’s strategy is to wait for the right moment and execute quietly. Apple has been investing in R&D to create new products that aren’t yet on the market.
2 :40 p.m. EDT: What percentage of revenue is left over due to supply chain problems? Tim states that it is difficult to predict with precision. There are limits to saying that March quarter will have a lower sales volume than December quarter. This is obvious, as fiscal Q1 has a larger quarter due to holidays. Tim sees “encouraging signs”, despite lingering challenges.
2 :39 p.m. PST Question about the metaverse opportunity. Tim states that Apple is constantly innovating. This question is not answered by the CEO, which is understandable.
2 :36 p.m. Pacific Standard Time: A question on component and logistics. Is Apple changing the footprint of its supply chain and geographical exposure to component vendors? Tim Cook claims that the industry’s problem of chip shortages is a global problem. Despite the challenges, Apple’s supply chain is doing well. Tim doesn’t see the need to rethink the supply chain.
2:34 PM PST: Questions about which pieces have performed better in services. Luca states that Apple set new records for the December quarter in all major regions, which is better than was expected. Paid subs have increased by 165 million to more than 700 million over the past twelve months. The overarching theme of “all looks great across all” is again evident.
